No life insurance- do I need it?

ginslia

Registered User
Messages
55
Looking for feedback on whether I really need life (or similar) cover.
I have no debts, no dependants.
death in service is included in my occupational pension, credit union also has some death benefit cover on savings.
am I (or my estate when I die) missing some other advantage by not having such cover?
 

Brendan Burgess

Founder
Messages
43,457
You don't need life insurance.

If you have a mortgage you will require a mortgage protection policy. I have argued that this should not be a requirement for single people without dependants. They would be better off using the premium to pay down the mortgage quicker.

Brendan
 

ginslia

Registered User
Messages
55
Thanks for the replies.
I did have life and serious illness cover connected to my mortgage, but I cancelled that when I paid off the loan.
Just checking I wasn’t missing something
 

Steven Barrett

Registered User
Messages
3,800
Thanks for the replies.
I did have life and serious illness cover connected to my mortgage, but I cancelled that when I paid off the loan.
Just checking I wasn’t missing something
Income protection is what you should look at if you don't have it already. It will replace part of your income if you are unable to work. Current benefits amount to €10,500 a year so it's a pretty big drop in income for most if they are unable to work.


Steven
www.bluewaterfp.ie
 

Ravima

Registered User
Messages
2,673
On the face of it you don't. However, if you are young and intend to marry and possibly have children, then you should.
 

ginslia

Registered User
Messages
55
@Ravima thats a no on all counts unfortunately!
@Steven Barrett re income protection, I have a limited experience of this type of protection, last time was post GFC when it seemed that if you had no reason to worry about job loss/ loss of income, cover was reasonable, but if there was anything precarious going on, it was more expensive/prohibitive.
Given the pandemic/business closures &furlough/ mnc reorganisations/ kbc&ub pullouts, what’s the current cost of this type of cover? (single, mid 40s, private sector, 70k net pa)
 

Steven Barrett

Registered User
Messages
3,800
@Ravima thats a no on all counts unfortunately!
@Steven Barrett re income protection, I have a limited experience of this type of protection, last time was post GFC when it seemed that if you had no reason to worry about job loss/ loss of income, cover was reasonable, but if there was anything precarious going on, it was more expensive/prohibitive.
Given the pandemic/business closures &furlough/ mnc reorganisations/ kbc&ub pullouts, what’s the current cost of this type of cover? (single, mid 40s, private sector, 70k net pa)
Income protection is salary insurance if you are sick and unable to work. It doesn't pay out if you are made redundant. It is catastrophe planning; it is unlikely to happen but if it does, the consequences will be bad. It is the most expensive of the risk benefits as it is the most likely to happen and it can potentially pay out until retirement age. There is tax relief on the contributions. If you go out on a claim, the benefit is taxed under PAYE.

If you want a quote, send me an email at steven@bluewaterfp.ie

Steven
www.bluewaterfp.ie
 

NoRegretsCoyote

Registered User
Messages
2,538
It is catastrophe planning; it is unlikely to happen but if it does, the consequences will be bad.
At your age serious illness is far more likely to strike than death. I had a bout of serious illness a few years ago that came out of the blue. I had an understanding employer and am over the worst but it would have been a serious problem if I'd had a physical job or was self employed.

In your case if you pass away there is no one left to be looked after, but if you get seriously ill you still have to look after yourself.
 

Brendan Burgess

Founder
Messages
43,457
On the face of it you don't. However, if you are young and intend to marry and possibly have children, then you should.

Hi Ravima

Should he not wait until he gets married?

If his wife is not dependent on him, then he would not need it.

And then wait until he has kids?

If he has a house with mortgage protection, they would be well covered anyway.

Brendan
 

Ravima

Registered User
Messages
2,673
tis cheaper when younger. Spouses are always dependent on each other!

the mortgage protection would allow the family to stay in the house, but no more.

having said that, death in service benefit, can be up to 4 times salary with some employers, which if you are on a high salary, is a decent lump sum. Also, one would presume that under the pension system, there would be a pension payable to widows and orphans. Then again, some schemes will stop the widows pension, is widow remarries.
 

Steven Barrett

Registered User
Messages
3,800
tis cheaper when younger. Spouses are always dependent on each other!

the mortgage protection would allow the family to stay in the house, but no more.

having said that, death in service benefit, can be up to 4 times salary with some employers, which if you are on a high salary, is a decent lump sum. Also, one would presume that under the pension system, there would be a pension payable to widows and orphans. Then again, some schemes will stop the widows pension, is widow remarries.
Usually only paid in defined benefits and some of the big pension schemes. The value of the employer's contribution counts as part of the 4 times salary maximum lump sum. The employee's value plus AVC's are refunded as a lump sum. The widow's pension is rarely stopped when they remarry. That happens with the State widow's pension. It may also happen with public service, I'd have to check the scheme rules.


Steven
www.bluewaterfp.ie
 

Steven Barrett

Registered User
Messages
3,800
I never knew this. Is this standard across schemes? I don't remember ever seeing this in any documentation.
Yes, it is standard across all schemes. It is the Revenue rules.

The Revenue do have the power of discretion that can be exercised flexibly, especially in the case of lower paid employees.
 
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